Iowa Producers Cut Costs

Iowa pork producers reduced their costs of production, captured the improving hog prices and recorded an average net profit of $25,642 on an average 251-sow farm in 1999."We are certainly not in the high profit times of the past, but it is more profitable than the last 24 months," says Tom Baas, Iowa State University Extension swine specialist.According to the Iowa State University (ISU) swine business

Advertisement

Iowa pork producers reduced their costs of production, captured the improving hog prices and recorded an average net profit of $25,642 on an average 251-sow farm in 1999.

"We are certainly not in the high profit times of the past, but it is more profitable than the last 24 months," says Tom Baas, Iowa State University Extension swine specialist.

According to the Iowa State University (ISU) swine business records, the top 1/3 of producers in the program had a net profit of $53,919, while the bottom 1/3 of producers had a loss of $28,182. For perspective, in 1998 top 1/3 producers lost an average of $35,454 and the bottom 1/3 lost $97,469 on an average 184-sow herd.

Producers averaged $33.96/cwt. for their hogs in 1999 and marketed at an average 254-lb. weight. The average cost of production was $34.84/cwt.

Cutting Costs "Producers continue to make improvements in their costs of production," says Baas.

With the overall cost of production of $34.84/cwt., feed costs totalled $19.54/cwt. In 1998, total cost of production was $37.46/cwt. and feed costs ran $22.42/cwt.

Producers averaged 348 lb. of feed/cwt. of pork produced. The average cost of diets was $5.62/cwt. Top 1/3 producers used 349 lb. of feed/cwt., but paid $5.53/cwt.

Baas also noted that the difference in cost of production is narrowing for the top and average producers.

"There is not a tremendous number of secrets anymore," he says. "Low feed cost is one thing that helped producers stay competitive."

The trimming of costs also shows producers continued to be very careful with expenditures and unnecessary costs, Baas says.

This year's farrow-to-finish summary included 58 operations. ISU also compiled summaries on wean-to-finish, breed-to-feeder pig, wean-to-feeder, breed-to-wean and feeder-to-finish operations. A full set of reports may be accessed at the Iowa Pork Industry Center's Web site at www.extension.iastate.edu/ipic/SER/99SBR.pdf.